What is the difference between an NRI Pan Card and a Normal Pan Card?

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Key Takeaways

A PAN Card is a 10-digit identification document that all taxpaying citizens of India must maintain mandatorily. Additionally, Any NRI (Non-Resident Indian) with a steady source of income in India and liable to taxes must also apply for PAN Card to file their tax returns. To know more about what is a PAN Card, its benefits, and the importance of an NRI PAN card, continue reading this article.

The Permanent Account Number or PAN is a 10-digit number that the Income Tax Department of India issues to all taxpaying citizens. The 10-digit number is embossed on an ID card that comprises your name, photograph, and date of birth, and the card is called a PAN card. The PAN card allows the IT department to link all transactions carried out by a particular individual, such as TDS/TCS credits, tax payments, income tax returns, correspondence, etc. The PAN card acts as an identifier for taxpaying citizens. PAN helps link various documents easily and keeps track of investments made, tax evasion and the growing tax base⁽¹⁾.

Benefits of Having a PAN Card

Acts as a proof of identity
Facilitates IT returns filing
Allows you to claim Income Tax refunds
Useful while opening a Demat Account
Simplifies the sale & purchase of assets
Necessary while making banker’s cheques, bank drafts & pay orders transactions.

Importance of an NRI PAN Card

To better understand if an NRI needs a PAN Card, it is vital to explore the three categories of NRI Bank accounts in India.

NRE (Non-Resident External) Account

If the principal and interest earned on your funds outside of India are tax-free, then you will need to maintain an NRE account. To open this kind of account, Form 60 acts as an alternative for PAN.

NRO (Non-Resident Ordinary) Account

If you are maintaining an NRO Account in India, it is mandatory to apply for PAN Card. An NRO account is a place to deposit your income from Indian sources such as rental income, pension, income from other investments, etc. These generated funds come under tax liability, but the tax deduction does not occur at the source.

FCNR (Foreign Currency Non-Resident Account)

FCNR acts like a fixed deposit account wherein the money earned overseas can be saved in the foreign currency by depositing it in a term deposit. Since the interest and principal are not subjected to taxation, an NRI can substitute Form 60 for PAN Card.

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NRI PAN Card Vs. Normal PAN Card

If you are an NRI and you have a steady income source in India, you will compulsorily need a PAN card to file your income tax returns, irrespective of your current country of residence. This income could be the result of receiving share dividends, a fixed amount that you obtained by renting real estate, mutual fund returns, or even profits gained from a business being run in India.

If you are applying for an NRI PAN Card, you are likely to need the following documents⁽²⁾:

Copy of passport
Copy of OCI or PIO card
Passport-sized photographs recently taken
Address proof of your current overseas residence
Statement of current overseas bank account

If you are a resident Indian, then the documents required are a bit different:

ID Proof Documents

Voter ID card copy
Passport copy
Driving license copy
Aadhaar card copy
Copy of the First Page of a Bank Passbook
Pensioner card copy
Recent passport-sized photographs

Address Proof Documents

Copy of the latest utility bill (Electricity, Landline, Gas, etc.)
Copy of marriage certificate
Passport copy
Driving license copy
Government-issued domicile certification
Post office passbook copy

Application Process: Difference Between NRI Pan Card & Normal Card

The PAN Card application process for NRIs is quite simple and can be done conveniently without much hassle⁽³⁾.

The steps are as follows:

Visit the official website of TIN-NSDL to begin the process of application.
Open form 49A, fill it out entirely by submitting the required documents.
Upload your ID, address, photograph and age proof.
Pay the fee.
Get a printout of your acknowledgement and use it to check the status of your application.

For Resident Indians, there are two modes of PAN card application - Offline and Online.

Offline Mode

Follow the same first three steps as applicable for NRI PAN Card applications.
Upload all your documents, and sign the form. Check the form thoroughly as you have to sign in three different places.
Check out the centres where you can send your PAN card application on the website. You can send your PAN documents along with a cheque or DD of INR 110 to any of these centres.

Online Mode

Visit the NDSL site
Type in your Aadhaar card number
Fill the form and review all the relevant details, and hit submit
Pay the fee of INR 110
You will receive a 15-digit acknowledgement number, which you can use to track the status of your application.

Conclusion

While every taxpaying Indian citizen needs to apply and have a valid PAN Card, it is not mandatory for NRIs. That said, NRIs with income sources and investments in India must ensure they have a PAN card. A PAN card enables you to seamlessly invest in the Indian Investment Market and grow your corpus through investments in Mutual funds, stocks, real estate, etc. You may temporarily provide Form 60, but a valid PAN card proves beneficial in the long run.

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*Disclaimer: This article is published purely from an information perspective and it should not be deduced that the offering is available from DBS Bank India Limited or in partnership with any of its channel partners.

The purpose of this blog is not to provide advice but to provide information. Sound professional advice should be taken before making any investment decisions. The bank will not be responsible for any tax loss/other loss suffered by a person acting on the above.